NCDOT Finance Overview NC FIRST Commission H. Burt Tasaico July - PowerPoint PPT Presentation

NCDOT Finance Overview NC FIRST Commission H. “Burt” Tasaico July 12, 2019

Agenda • Why are we here? • Problem and Transportation Disruptors • The User Pay Principle • NC Transportation Milestones • NC Transportation Revenues • Federal • State • Variables and Sources • Trends • Driving Forces Transforming All of Mobility 2

Why are we Here Growing population wanting safe, affordable, eco-friendly logical mobility that is seamless Transportation Disruptors Automation, Connectivity Shared Problem mobility, CAFÉ* standards, Demographics, Electric/Hybrids Declining Revenues Motor fuel, highway use and driver and vehicle fees *CAFÉ – Corporate Average Fuel Efficiency 3

Transportation Disruptors • Federal Funding • Electrics/Hybrids • CAFÉ Standards • Ride Sharing • Car Ownership • Micro-Mobility • Commuter Preferences • Population • Automation • Connectivity Miles Driven 4

User Pay Principle Motor Fuel Tax Driver & Licenses fees Highway Use Tax Federal Funding Innovative GARVEEs, SIBs, Financing TIFIA, BABs, PABs, GARVEE – Grant Anticipation Revenue Vehicles TIFIA - Transportation Infrastructure Finance and Innovation Act PPP’s Section 129, Toll SIB – State Infrastructure Bank BAB – Build America Bonds Credits, etc. PAB – Private Activity Bonds (2009 – 2010) Section 129 – of Title 23 5

Vehicle Ownership - $7,000/year Maintenance Insurance Financing 7% And Tires 16% 20% Transportation Depreciation 33% System (TS) Fees and Fuel 24% Fuel 17% TS - Gas 13% Fees - Tax* 4% 7% AAA 46.7 ¢/mile Transportation System Fee IRS 54.5 ¢/mile + Fuel Tax = 11% ($770) * Federal and State motor fuel taxes 6

North Carolina – Funding Milestones Private Investors Vehicles and Needs Building Progress -NC Department of Transportation -NC Highway Commission -Turnpikes -Local Funding (Powell Bill) -Plan Roads (1901 & 1915) -Highway Fund -Motor Fuel Tax (Indexed) - Motor Fuel Tax (1921/1907?) -Increased DMV Fees -Present DMV Fees -More Bonding -Bonding (1921, 1923,1925,1927 - -First TIP Total $115M) Before 1900s 1950 to 1988 1900 to 1949 1 st Federal Road -1 st Federal Aid (1916) -Trust Fund – Highway Account • The National -Trust Fund – Mass Transit Account -Federal Motor Fuel Tax (1932 Road – (1806) - Federal Diesel Tax ≠ Gas Tax for deficit reduction) 7

North Carolina – Funding Milestones (Cont) Population & Growth Building Progress -Cash Management Policy -NC Highway Trust Fund • Highway Use Tax (1989) -Increased DMV Fees -Debt Limit -More Bonding -Turnpike -Project Cash Flow -Motor Fuel Tax Collection at Distribution Pt -10 Year Work Plan -STI -SL 2015-2 & SL 2015-241 -SL 2018-16 1989 to 1999 2000 to Present -SAFETEA-LU, MAP-21 Expired -Multi-year Authorization Bills -FAST Enacted -Last Federal Gas Tax Increase -Federal Trust Fund Bailouts -Project Cash Flow -Federal Gas Tax renewed -State Infrastructure Bank -CAFÉ Standards -GARVEE -TIFIA 8

NC Transportation Revenues 75% Overall 25% Overall 9

Federal Aid Revenue Sources Motor Fuel • Gasoline 18.4 cents/gallon Tax: • Diesel 24.4 cents/gallon Truck Sales: 12% of retail price for trucks over 33,000 lbs. or trailers over 26,000 lbs. GVW Truck Use: Up to 55,000 lbs. No Tax • Over 55,000 lbs. $100 + $22/1,000 lbs. over 55,000 lbs. • ($550 maximum) Tires: 9.45 cents/10 pounds over 3,500 lbs. maximum rated load • capacity • 4.725 cents for bias-ply or super single tire General Fund $143.6 billion since 2008 (through 1/2016) Transfers: 10

State Revenue Sources Motor Fuel Gasoline and Diesel 36.2 cents/gallon (effective 1/1/2019) Tax DMV Fees 20+ Driver and Vehicle fees Most fees adjusted Quadrennially based on CPI Highway Use 3% of vehicle sale transaction net of trade-in Tax General Fund None Transfers 11

Revenue Variable and Data Sources Source Variables Data Sources Rate Population – OSBM Demographics • Motor Fuel CPI-Energy – Global Insight • Tax • Legislative Fuel Consumption In-House Model (SAS) • Rate General Statute DMV Fees • CPI – Global Insight • Transactions • Regression Analysis NC Population Growth • Highway Use Tax Rate • General Statute Vehicle Pricing In-House Mode (SAS) • Federal Revenue Congressional Budget Office • 12

10 Year Revenue Forecast – State & Federal Sources Year over Year Change – Total Revenue $ in Millions Year over Year Change – Revenue Source Motor Fuel Tax Fees DMV Highway Use Tax Federal 13

NCDOT Annual Highway Composite Construction Cost Index by Calendar Year (2012 is base year) 130 120 110 100 90 80 2012 2013 2014 2015 2016 2017 2018 CCI 100.0 101.6 95.4 103.0 110.7 118.7 120.6 14

Future Driving Forces Transforming All of Mobility 15

Historical – Vehicle Technology Deployment Vehicle Deployment Typical Cost Market Saturation Technology Cycle Premium Share Air bags 25 years A few hundred 100%, due to federal (1973-98) dollars mandate Automatic 50 years $1,500 90% U.S. transmissions (1940s-90s) 50% worldwide Navigation 30+ years $500 and rapidly Uncertain; probably systems (1985-2015+) declining over 80% Optional GPS 15 years $250 annual and Uncertain - 10+% Services rapidly declining Hybrid 25+ years $5,000 Uncertain - Currently vehicles (1990s-2015+) about 4% 16

Evolving – Vehicle Fuel 17

Projection – Autonomous Vehicle Deployment Stage Decade Vehicle Vehicle Vehicle Sales Fleet Travel Available – large 2020s 2-5% 1-2% 1-4% price premium Available - moderate 2030s 20-40% 10-20% 10-30% price premium Available – minimal 2040s 40-60% 20-40% 30-50% price premium Standard - included on 2050s 80-100% 40-60% 50-80% most new vehicles Saturation (everybody 2060s ? ? ? who wants it has it) Required – on all new ??? 100% 100% 100% and operating vehicles 18

Projection – Autonomous/Vehicle Ownership Current The Car - will grow smarter and more efficient, with high-efficient engines, lighter materials and autonomous driving vehicles Single The Industry – will evolve with new Ownership competition from tech companies, and suppliers capable of producing high- tech parts at low prices Multiple The Driver – will look at cars differently Ownership sharing cars and using them as a space to consume media and make calls Self Transportation Funding Model – will Ownership have to evolve in anticipation of the change 19

Questions? 20